Ia Financial Corporation Inc. · TSX:IAG
Ia Financial — Investor Presentation (March 2019)
21 slides from Ia Financial's investor presentation, March 2019
Slide 1: Creating Value the iA way
Creating Value the iA way Denis Ricard President and CEO Jacques Potvin EVP, CFO and Chief Actuary Investor presentation March 2019
Slide 2: Table of contents
Table of contents 3 Solid fundamentals 9 Business growth 15 Share price and book value 4 New company structure 10 Acquisitions 16 Book value vs. peers 5 EPS guidance 11 Capital structure 17 Dividend 6 Earnings visibility 12 Capital issuances outstanding 18 Investor relations 7 Reserves 13 Macroecono
Slide 3: Solid fundamentals
Solid fundamentals New company structure is beneficial from a value-creation standpoint Steadily growing EPS guidance and delivering on our targets Reserves are well positioned with good macroeconomic protection Capital position is better than ever Strong and flexible balance sheet Susta
Slide 4: New company structure
New company structure Beneficial from a value-creation standpoint iA Financial • Structure aligned with other publicly traded P&C and life insurance companies Corporation Inc. (IAG ticker on the TSX) • Gives iA more flexibility to manage debt instruments and execute growth strategy Holding company •
Slide 5: Steadily growing EPS guidance and delivering on our targets
Steadily growing EPS guidance and delivering on our targets Committed to minimum 10% annual EPS growth until IFRS-17 EPS Guidance (diluted) +10% Target range Reported EPS $3.22 $3.57 $3.97 $3.57 $5.19 $4.81 $5.59 Core1 EPS N/A $3.30 $3.54 $4.04 $4.69 $4.86 $5.55 5 1 See "Reported EPS and Core EPS Re
Slide 6: Earnings visibility with various profit improvement initiatives
Earnings visibility with various profit improvement initiatives Multiple levers to reach or exceed our 10% EPS growth target up to IFRS-17 in 2022 3% 1% 2% + + + ≥ 6% profit distribution acquisitions 10% organic improvement (US and annual growth a core distribution) EPS growth in all lines of functi
Slide 7: Reserves are well positioned
Reserves are well positioned P/H experience indicative of long-term trend 2018 year-end assumption review: Policyholder experience 2018 2017 2016 2015 2014 No material issue in 2018 (EPS impact in cents1) URR is 15 bps ahead of the promulgated rate Individual Insurance 8 (18) 26 24 (1) 2018 policyho
Slide 8: Capital position is better than ever
Capital position is better than ever Good capital generation and flexible balance sheet • Solvency ratio of 126%1 well above 110%-116% 2019 target 2019 • Organic generation target of $250M-$300M in 2019 (~$250M generated in 2018) capital • Very low sensitivity of solvency ratio to market and interes
Slide 9: Sustaining outperformance through business growth
Sustaining outperformance through business growth Solid execution • Individual insurance: 1st in individual insurance sales (number of policies) Insurance • Employee plans: $93M sales in 2018 & 8% YoY premium growth in 2018 in Canada • Dealer services: One of top 2 in dealer services & 5% YoY sales
Slide 10: Growing through acquisitions is a priority
Growing through acquisitions is a priority US businesses and distribution in Canada are top priorities • HollisWealth: iA is now one of the largest non-bank distribution networks Recent • DAC: Moving toward a meaningful business in the US acquisitions < • PPI: iA is now the leader in independent ins
Slide 11: High-quality capital structure with 86% Tier 1
High-quality capital structure with 86% Tier 1 Industrial Alliance Insurance and Financial Services Inc. (Opco) Common equity $5,148M 80% Participating policyholders’ accounts $45M Permanent 86% Tier 1 Perpetual preferred shares $125M Rate-reset preferred shares $400M 20% Non-permanent Subordinated
Slide 12: Capital issuances outstanding
Capital issuances outstanding Industrial Alliance Insurance and Financial Services Inc. (Opco) Issuances outstanding Nominal Type Rate Issued by redeemable date value Pref. shares, class A, series B Since 2011 $125M 4.60% Feb. 2006 (Tier 1, perpetual, permanent) Subordinated debentures May 2019 $250
Slide 13: Macroeconomic protection
Macroeconomic protection Gives management time to act Protection against LT interest rate decrease Stock market protection (at year-end) (drop in TSX absorbed before reserves need strengthening, at year-end) Canadian LT rate 32% iA protection 30% 3.27% Minimum LT rate 27% 40 bps 25% 2.51% 23% 23 bps
Slide 14: $34.6B investment portfolio
$34.6B investment portfolio Well diversified and of high quality Distribution of Investment Portfolio IMPAIRED INVESTMENTS AND PROVISIONS Gross impaired investments $24.5M Provisions for impaired investments $8.6M Corporate bonds 30% Net impaired investments $15.9M Net impaired investments as a % of
Slide 15: Share price and book value
Share price and book value Low price to book value ratio $50.493 IAG Share Price $47.404 Historical CAGR: 10.3% Book Value Per Share $8.441 Historical CAGR: 9.6% $7.882 At year-end 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20193 Price/ 2.17 2.22 1
Slide 16: iA shareholder value creation vs. peers
iA shareholder value creation vs. peers Book Value Per Share iAG and Dividends Paid +327% (end of period) Peers +193% June 30, 2004 0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 16
Slide 17: Dividend to common shareholders
Dividend to common shareholders Steady increases every 3rd quarter in line with target payout ratio of ~30% Dividend of 41.5¢ per share payable in Q1/19 Steady increases every 3rd quarter First lifeco in Canada to resume dividend increases after the financial crisis 17
Slide 18: Investor Relations
Investor Relations Contact 1080 Grande Allee West PO Box 1907, Station Terminus Quebec City, QC G1K 7M3 Tel.: 1-800-463-6236, ext. 105862 ia.ca/investorrelations investors@ia.ca Next Reporting Dates Q1/2019 - May 9, 2019 Q2/2019 - August 1, 2019 Q3/2019 - November 6, 2019 For information on our earn
Slide 19: Non-IFRS financial information
Non-IFRS financial information iA Financial Group reports its financial results and statements in accordance with International Financial Reporting Standards (IFRS). It also publishes certain financial measures that are not based on IFRS (non-IFRS). A financial measure is considered a non-IFRS measu
Slide 20: Forward-looking statements
Forward-looking statements This presentation may contain statements relating to strategies used by iA Financial Group or statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “may”, “will”, “could”, “should”, “would”, “suspe
Slide 21: iA Financial Group
IAB Financial Group